With the rapid change in the Arctic sea ice, a large number of sea ice observations have been collected in recent years, and it is expected that an even larger number of such observations will emerge in the coming years. To make the best use of these observations, in this paper we develop a multi-sensor optimal data merging (MODM) method to merge any number of different sea ice observations. Since such merged data are independent on model forecast, they are valid for model initialization and model validation. Based on the maximum likelihood estimation theory, we prove that any model assimilated with the merged data is equivalent to assimilating the original multi-sensor data. This greatly facilitates sea ice data assimilation, particularly for operational forecast with limited computational resources. We apply the MODM method to merge sea ice concentration (SIC) and sea ice thickness (SIT), respectively, in the Arctic. For SIC merging, the Special Sensor Microwave Imager/Sounder (SSMIS) and Advanced Microwave Scanning Radiometer 2 (AMSR2) data are merged together with the Norwegian Ice Service ice chart. This substantially reduces the uncertainties at the ice edge and in the coastal areas. For SIT merging, the daily Soil Moisture and Ocean Salinity (SMOS) data is merged with the weekly-mean merged CryoSat-2 and SMOS (CS2SMOS) data. This generates a new daily CS2SMOS SIT data with better spatial coverage for the whole Arctic.